Medicaid

Careful planning can often avoid the traps that lead to bankruptcy. Filing for bankruptcy is a very difficult thing.  However, the impact is even greater, if it is done in your senior years and should be avoided if possible, according to nwi.com in “Planning key to avoid becoming a bankruptcy statistic in retirement.” Many people think that estate planning attorneys also handle investment advice. Some attorneys cover both the law and how to handle your investments. I have always wanted to limit the area of possible malpractice to just specialty. To put your financial house in order, consider working with a Certified Financial Adviser. For starters, people need to do a complete financial analysis. This includes a hard look at current and potential future health care costs, which can decimate even the best retirement plan. That means planning for early retirement, long before Medicare is available. Resources may include a younger spouses’ COBRA, contributing to a Health Savings Account and any coverage gap that may occur between the time the person retires and when they reach age 65 and are eligible for Medicare. Planning needs to start early so include the cost of college education for your children and planning for retirement. Saving rates slow down during retirement, so getting started on saving early is critical. A financial plan can expose shortfalls. People may not want to consider themselves at risk. There is a strong tendency to procrastinate, thinking that there is enough time to catch up. The sooner you start planning, saving and facing reality, the better your chances of not filing for bankruptcy. Another reason for the increasing rate of bankruptcies is that we are all living longer. That’s a great thing but it also means that health care costs are increasing, especially long-term care. Medicare does not cover long-term care, including assisted living, memory care and the need for nursing home care. It does not cover routine eye care, dental care or hearing aids. The national average costs for long-term care in the U.S. in 2016 were $225 a day or $6,844 per month for a semi-private room and $253 a day or $7,698 per month for a private room. All other health care costs have been increasing 6% annually, according to the Center for Medicare and Medicaid. As a nation, we spent $3.2 trillion for health care in 2016. Those cost increases make planning a challenge for seniors and their families.  Therefore, many unforeseen issues occur. Another reason for the increase in bankruptcies among seniors is the “unwanted retirement.” Many older workers were downsized during the Great Recession and 60% of retirements were unplanned, according to a survey from TransAmerica. Downsized workers took on debt to survive and are now entering the next phase with expenses they did not count on having. Many returned to the workforce, but at lower salaries. The Bureau of Labor Statistics says 36% of those 65 and older are still working—and 20% of those who are 70 and older are still